Following a tumultuous week for the stock market, Certificates of Deposit (CDs) provide a reliable refuge from financial volatility, guaranteeing a fixed interest rate regardless of market fluctuations. Leading CDs are currently offering attractive fixed returns of up to 4.50% APY, surpassing yesterday’s reported inflation rate of 2.4% by more than double. Digital banks, known for their cost-effective online operations, are outperforming traditional brick-and-mortar institutions by passing on significant savings to customers through notably higher interest rates, often exceeding those of traditional banks by more than tenfold while maintaining federal insurance protection.
If you’re hesitant about committing your funds to a long-term investment, consider constructing a CD ladder with staggered maturity dates to access portions of your savings while capitalizing on higher long-term yields, regardless of the direction of interest rates. Alternatively, opt for no-penalty CDs for competitive rates and maximum flexibility, accessible whenever needed.
Discover the most competitive CD rates this weekend across various terms, with a quick signup process:
Best CD Rates for Friday, April 11, 2025
Today’s top returns are offered by FDIC-insured digital banks and online accounts, delivering up to 4.50% APY with minimal or no initial deposits at Bread Financial, Alliant Credit Union, and other reputable providers as of April 11, 2025.
– Bread Financial Savings CDs: 4.50% APY on 6-month terms with a $1,500 minimum
– Valley Bank Online CDs: Up to 4.30% APY on 3-month terms with a $25,000 minimum and 4.00% APY on 12-month terms with a $500 minimum
– Alliant Credit Union CDs: 4.10% APY on 6-month terms with a $1,000 minimum
– Discover Bank CDs: 4.00% APY on 12-month terms with no minimum
– American First Credit Union CDs: 4.00% APY on 12-month terms with a $1 minimum
– Barclays Bank Online CDs: 4.00% APY on 12-month terms with no minimum
– CIT Bank No-Penalty CD: 3.50% APY on an 11-month term with a $1,000 minimum
While online-only banks and digital accounts may not have the same recognition as larger institutions, each is FDIC-insured or works with an FDIC-insured bank to offer protected deposit accounts, safeguarded for up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) – similar to accounts at traditional banks.
The Federal Deposit Insurance Corporation (FDIC) monitors the financial system and insures consumer deposit accounts. Below are the national deposit rates for a $10,000 minimum deposit in March compared to February 2025 for various traditional low-interest deposit accounts:
– Savings: 0.41% (no change from February)
– Interest checking: 0.07% (no change)
– Money market: 0.63% (down 1 basis point)
– 1-month CD: 0.25% (up 3 basis points)
– 3-month CD: 1.43% (down 2 basis points)
– 6-month CD: 1.61% (down 2 basis points)
– 12-month CD: 1.78% (down 2 basis points)
– 24-month CD: 1.49% (up 4 basis points)
– 36-month CD: 1.35% (up 4 basis points)
– 48-month CD: 1.27% (up 4 basis points)
– 60-month CD: 1.34% (up 3 basis points)
The FDIC is an independent government agency tasked with ensuring stability and public confidence in the U.S. financial system by providing insurance on consumer deposit accounts.
The Federal Reserve’s decisions on the key interest rate greatly influence CD rates and other financial products. The Fed’s recent moves include pausing rate cuts and maintaining the federal funds target interest rate range of 4.25% to 4.50%. The Fed is focused on achieving “maximum employment” and managing inflation.
The next Fed policy meeting is scheduled for May 6-7, 2025, with expectations that rates will remain steady. Economists are closely monitoring economic data and risks to anticipate future Fed actions.
Economic indicators and labor market data were closely watched for clues on potential future Federal Reserve rate cuts, as inflation remained relatively stable between 2.5% and 4% after peaking at 9.1% in June 2022. The Bureau of Labor Statistics reported a robust increase of 228,000 jobs in March, exceeding expectations and the previous month’s figure of 151,000. Despite a slight uptick in unemployment to 4.2% from 4.1% in February, the rate stayed within a narrow range since May 2024.
The release of the consumer price index on April 10 showed a decrease in the annual inflation rate to 2.4% in March, lower than forecast and down from 2.8% in February. This decline was driven by lower energy costs and decreased travel expenses. Federal Reserve Chair Jerome Powell commented on the uncertain economic environment, hinting at potential tariff impacts but refraining from immediate rate cuts.
The Fed’s rate-setting panel, led by Powell, is scheduled to announce a decision on rates on May 7, 2025. For those considering financial investments, factors to consider include the term length, rate of return, minimum deposit requirements, bank type, and penalties for early withdrawal. Digital banks often offer higher interest rates, but traditional brick-and-mortar banks may provide added convenience for some customers. It’s essential to weigh these factors against your financial goals when selecting a certificate of deposit.
Consider this revised text:
Sacrificing potential gains — for instance, 90 days of accrued interest for Certificate of Deposit (CD) terms lasting up to 24 months. Typically, the penalty fee increases with longer terms.
Delve deeper: When is it advantageous to break a CD? Insights on early withdrawals and breaking even
Advantages of a certificate of deposit
1. Guaranteed returns: With a CD, you deposit funds and earn a fixed interest rate over a specified term, which becomes available upon maturity.
2. Higher rates compared to traditional accounts: Numerous banks and financial institutions provide CDs with interest rates surpassing those of standard savings or money market accounts. Digital and online banks usually offer the most competitive rates.
3. Variety of CD terms: CD terms range from three months to five years or longer, catering to diverse financial objectives. Rates for six-month CDs can exceed average bank account returns, while longer terms offer rates akin to top-tier high-yield savings accounts.
Disadvantages of a certificate of deposit
1. Penalty for early withdrawals: Accessing funds before the CD term ends may result in fees equivalent to several months’ worth of interest, typically ranging from three to six months based on the account and term length.
2. Not the highest investment returns: While CDs provide a secure means of earning interest, potential long-term earnings from stocks, bonds, mutual funds, annuities, or other securities could be greater. Additionally, locking funds in a CD may cause missed opportunities if average rates increase.
3. Inflexibility in adding funds: Once a CD matures, you cannot increase your balance until after maturity. At that point, you may transfer your funds to another account or roll them over into a new CD.
Delve deeper: High-yield savings account vs. CD: Key considerations during high rate environments
Alternatives to a certificate of deposit
Aside from CDs, various low-risk options exist to earn interest on savings, providing safe and consistent returns with the flexibility to add to or withdraw funds penalty-free.
1. High-yield savings account (HYSA): Offers rapid growth of savings at variable rates potentially exceeding 5% APY without withdrawal penalties.
2. Money market account (MMA): Competitive rates compared to standard savings accounts, offering similar accessibility to funds.
3. Higher-risk investments: Stocks, index funds, and mutual funds through brokerage accounts or investment platforms typically yield higher returns than CDs, though they also involve greater risks.
Delve deeper: Optimal low-risk investment choices for retirees to achieve safe, consistent returns
FAQs: CDs, security, and wealth accumulation
Gain insights on how CDs function, selecting the best options for your financial objectives. Explore our collection of personal finance guides for money-saving tips, income generation, and long-term wealth growth.
How can I track my CD maturity date?
Banks usually notify you through mail, email, or online alerts as your CD approaches maturity. Ensure your contact details
While a savings account allows for flexible movement of your money without penalty, a Certificate of Deposit (CD) requires you to lock in your deposit over a specified period of time, returning your principal plus interest after the account matures. This lock-in period and penalties that discourage early withdrawal allow a bank to better plan how long it has to make money off your deposit, and it is typically willing to pay a little more for that reliability.
Is my money safe with an online-only bank like Lending Club or SoFi?
Yes, online-only banks and digital accounts are as safe as their traditional counterparts. They are either FDIC-insured chartered banks or partner with more recognizable banks to offer deposit accounts protected by the government for up to $250,000. The FDIC insures the safety of your money, even if the fintech were to fail or go out of business. Look for terms like “member FDIC,” “FDIC insured,” or “NCUA insured” when comparing your options.
What is compound interest?
Compound interest means earning interest on both your initial deposit and any interest you earn over time. It’s a powerful way to boost your savings by making every dollar work harder and grow faster towards your financial goals. An account’s Annual Percentage Yield (APY) is the total amount of interest you’ll earn on your deposit over one year, including compound interest, expressed as a percentage.
What is a jumbo CD?
A jumbo CD requires a minimum of $100,000 to open the account. Like regular CDs, jumbo CDs come with a fixed interest rate and term. While in the past, they offered higher rates than traditional CDs, it’s not always the case due to current interest rate trends. Learn more about jumbo CDs and why it’s important to compare rates before committing.
What is a no-penalty CD?
A no-penalty CD allows you to withdraw your money without penalty before the CD matures. This flexibility may result in lower rates compared to traditional CDs. With high rates available, a high-yield savings account might offer comparable or higher rates with the same flexibility.
What is a CD ladder?
A CD ladder is a savings strategy that involves spreading your money across multiple CDs to take advantage of high rates without tying up your full investment in one long-term CD. This method allows you to access a portion of your investment at regular intervals. Learn how to build a CD ladder to maximize returns while maintaining flexibility.
What is a brokered CD?
A brokered CD is a certificate of deposit purchased through a brokerage firm instead of a bank or credit union. Similar to traditional CDs, you select a term length with a fixed interest rate.
Explore brokered CDs to purchase regular CDs via your investment account, whether new or “used” from other investors. Gain insights on what to consider before investing in brokered CDs. Understand the distinction between saving and investing, which hinges on the accessibility of funds and associated risks. Saving entails securing money in low-risk accounts, while investing involves acquiring assets like stocks, bonds, or mutual funds for potentially higher returns. Discover the optimal strategy for your financial growth through our comprehensive guide on saving and investing. Note that annual percentage yields mentioned were accurate as of April 11, 2025, at 7 a.m. ET, with variations in APYs and promotional rates across regions. Consult reputable sources such as FDIC, U.S. Bureau of Labor and Statistics, and CME Group for reliable financial insights.
